Phase III clinical research has the potential for eye-catching margins, but private practitioners who enter the, field with that motive seldom stay. The reason? Financial returns don't come easily, and the process is fraught with opportunities for failure.

"What frequently happens is a physician thinks, 'Wouldn't it be nice to have a little extra income?' But they don't appreciate the time and effort involved, and they quickly become disillusioned," says Jay Young, M.D., medical director of South Orange County Medical Research Center in Laguna Woods, Calif.

Young also is a founder of AmericasDoctor, a site management organization that helps practices recruit patients and manage clinical research activities.

Done well, clinical research can produce margins that rival those from patient care. According to CenterWatch, a Boston-based publishing company that tracks the clinical trial industry, the average study brings in about $58,000 in revenue, with net income as high as 40%.

Done poorly, a study not only can lose money but also can permanently shut a practice out of clinical trials.

"You're only as good as your last study," says Herbert Baraf, M.D., medical director of the Center for Rheumatology and Bone Research in Wheaton, Md. "There are a lot of things you have to do so that companies will work with you again, and if you don't, you will be out of it."

NUTS AND BOLTS

Chief among the must-dos: recruiting patients, according to Steven Mayo, CEO of Emissary, an Austin, Texas-based clinical research organization.

"Eighty percent of clinical trials fail because of inadequate numbers of patients, so the primary selling point of a practice to pharma is its ability to populate a study," says Mayo, whose firm designs and manages clinical trials under contract to drug and device manufacturers.

Also important: adequate space, equipment and administrative systems to handle the flow of research patients.

A careful review of practice dynamics is necessary to ensure financial viability. Non-starters include dissent among partners about doing research and not having a qualified person to deal with the nitty-gritty details.

Other challenges include strictly adhering to FDA-prescribed good clinical practices, responding promptly and thoroughly to all requirements of study sponsors, setting up systems to properly manage and account for research activities and spending time with patients that far exceeds normal office-visit parameters.

Even with all elements in place, it pays to carefully pick and choose trials.

"The gross reimbursement amount can be attractive, but when you look at what's required, it can be negative," explains Roger Gammon, M.D., director of research at Austin Heart, a cardiology practice in Austin.

"We've been involved in some trials that paid $12,000 per patient, but we ended up losing money because of all the interventions involved."

MORE THAN FINANCIAL REWARDS

Perhaps because of the downside, about half of clinicians involved in research in any given year don't participate a year later. Those who stick with it, however, can realize intangible returns in addition to direct economic gains, according to physician executive Bart Denys, M.D.

"It widens treatment options for patients, it sends a clear message to the community that your practice is on the edge of what's new in clinical practice, and it frequently can provide free medical care to patients who otherwise would have difficulty keeping up with the cost," says Denys, medical director of clinical research for the Cardiovascular Institute of the South in Thibodaux, La.

With all partners on board and referring patients, revenue from clinical research can equal up to 3% of total practice revenue, according to Denys.

But most practices never achieve that level of participation, and principal investigators have to keep reminding their colleagues about ongoing trials. Gammon, for example, regularly distributes fliers and talks up protocols during practice meetings.

TRANSPARENCY REQUIRED

Interventional or device protocols must comply with slightly different regulations and usually produce lower margins than drug trials. Regardless of the type of research, however, payments are strictly for services performed. Beefed-up FDA disclosure requirements add further transparency.

Phase IV studies are a different matter. Although drug and device manufacturers legitimately need to monitor the efficacy of products once they are on the market, some doctors view negatively any payments for completing post-market surveys.

"They're just a prescription-altering scheme with no rigid study design or follow-up, and I don't participate," says Denys.

The FDA also requires investigators to disclose to patients any financial interest they have in the company sponsoring a trial, but the issue remains ethically murky. Do patients really understand the implications when a physician stands to gain from a trial? Can a doctor ever be objective in such circumstances?

Safeguards have been put in place, such as conducting multi- rather than single-center trials and having principal investigators step back from analyzing data or certain test results.

Still, some physicians prefer to steer entirely clear of any conflicts.

"I won't establish any financial interest in any company that I'm doing research for, and I have no financial interest in any companies whose products (like stents) that I use," says Gammon.

"When I do procedures, I realize it's not just me and my patients. I'm viewed by the medical community as a thought leader, and I don't want to have any thought in my mind about my decision to use a product leading to the purchase of more products."

With so much at stake, many practices-wisely-start on a small scale with a few relatively low-paying studies that don't require tremendous resources. However, they can get off track by adding infrastructure to do more without fully understanding what's involved.

"As long as it's like a hobby, doctors rarely attribute the total cost," says Brian Dufrene, principal of Aveloce, a research consulting firm in Lockport, La. "After they add capacity, they think, 'What happened? I was making money when I was doing one or two studies.' But really they were losing money all along."

Whether it is managed with outside support or internal resources, clinical research best succeeds when it is integrated with the overall practice.